Price differentiation is
A) a form of competition-based pricing.
B) a form of cost-based pricing.
C) a form of demand-based pricing.
D) focused on achieving fewer sales but at higher prices.
E) focused on selling different goods for different prices.

Question

Quizplus · Accepted Answer

Price differentiation is a form of demand-based pricing, where prices are set based on consumers' willingness to pay for a product or service. The idea is to sell the same product to different customers at different prices, based on their perceived value of the product. This can help a company maximize revenue and profits by capturing more of the consumer surplus. Price differentiation can involve different pricing strategies, such as segmenting the market, offering discounts to specific customer groups, providing different product features, or using dynamic pricing algorithms. Therefore, options A, B, D, and E are incorrect.

Price Differentiation Is